Covid-19 effect: Pakistan estimates losses of 0.8 to 1.3 percent of GDP growth
ISLAMABAD: Pakistan has made a Covid-19 pandemic assessment affecting the country’s GDP growth ranging from 0.8 to 1.3 percent and decided to prepare an action plan for the social / economic sector in consultation with the World Bank (WB) to reduce negative impacts.
The Planning Commission considers that Pakistan’s GDP growth will face a Covid-19 effect in the range of 0.8 to 1.3 percent so that Pakistan’s GDP growth will be at 2 to 2.5 percent against the previously estimated target of 3.3 percent for the current fiscal year . Pakistan’s real GDP growth rate target will be revised down so that all other macroeconomic targets must be adjusted again.
When contacted, Deputy Chairman of the Planning Commission Mohammad Jehanzeb Khan said, “The Pandemic Covid-19 has shaken the global market and the real economy at breakneck speed. The impact also adversely affects emerging markets, including Pakistan. The impact of the virus will be very broad, ranging from depressed international trade, lower foreign remittances, depressed GDP growth to a reduction in government revenues (and increased spending) and the impact on the real economy which will lead to high unemployment. While it is hoped that the virus may be contained in the future, the economic impact is likely to reverberate far beyond the short-term horizon. “
An important meeting was held here Thursday in Block-P at a video conference in which ministry representatives and donors participated.
The top official said that the UNDP resident coordinator was assigned to coordinate with various UN and multilateral agencies and bilateral donors with a mandate to produce losses to the Pakistani economy. “UNDP shared a detailed report with Pakistan on Thursday during this official meeting to identify the social and economic sectors which have far reaching negative impacts on the Pakistani economy,” official sources said.
World Bank senior officials also presented preliminary work to identify sectors for the preparation of an action plan for mitigating social and economic frameworks.
During the meeting, the source said that one member of the Planning Commission raised objections as to why multilateral donors were assigned to prepare action plans for the Pakistani economy before the Planning Commission and its research arm, the Pakistan Economic Development Institute (PIDE), despite having many economists, specialists and researchers from all fields. However, an official responded at the meeting that donor support was needed which indicated that Islamabad intends to seek more foreign loans from donors to overcome its economic woes.
The official said that the National Coordinating Committee (NCC) formed by the government had assigned the deputy chairman of the Planning Commission to assess the economic and social losses caused by the spread of the corona virus in the country. The Planning Commission summons all ministries / divisions and related departments and provinces to produce estimated losses. On the sidelines, they asked UNDP to coordinate with UN agencies and other multilateral and bilateral donors to make their own assessments. Now the Planning Commission and UNDP have prepared their reports so the government will reconcile this estimate.
The Planning Commission’s high-up presents GDP losses in the range of 0.5 to 1.3 percent, but the authorities call the estimated 0.5 percent loss “conservative and bureaucratic” and state that losses are clearly on the higher side. They estimate that losses in front of GDP stand at conservative estimates in the range of 0.8 to 1.3 percent at least and the impact will also continue to have an impact on GDP growth for the next fiscal year as well so that the target for next year’s projections will be trimmed.
It is estimated that the manufacturing, international trade and retail, agriculture and services sectors will be negatively affected for at least the next six months.
UNDP representatives presented detailed reports of 65 to 70 pages stating that they had established a secretariat in their office to coordinate with donors for assistance to Pakistan to overcome the challenges of the COVID-19 pandemic. Now the WB is expected to share an action plan for a possible socio-economic front next week.